Zagari and Habib (Costs) - [2010] FamCAFC 192

FAMILY COURT OF AUSTRALIA

ZAGARI & HABIB (COSTS)

[2010] FamCAFC 192

FAMILY LAW - APPEAL – COSTS – where the appeal was allowed in part – oral applications by both parties for costs – where there are no circumstances justifying an order for costs in favour of either party – applications dismissed.

FAMILY LAW - APPEAL – COSTS CERTIFICATES – where both parties sought costs certificates in the event that no order for costs was made – where the preconditions for the granting of certificates are satisfied – where the granting of certificates is a discretionary exercise of power – applications dismissed.

Family Law Act 1975 (Cth) s 117
Federal Proceedings (Costs) Act 1981 (Cth) s 6 and s 9

Tyson and Tyson (No 2) (1993) FLC 92-401

APPELLANT:

Ms Zagari

RESPONDENT:

Mr Habib

FILE NUMBER:

ADC

5300

2007

APPEAL NUMBER:

2009

DATE DELIVERED:

8 September 2010

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Strickland J

HEARING DATE:

8 September 2010

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

28 August 2009

LOWER COURT MNC:

[2009] FMCAfam 913

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr McQuade

SOLICITOR FOR THE APPELLANT:

Ann Josephson Lawyers

COUNSEL FOR THE RESPONDENT:

In person

Orders

The oral application for costs made by each party be dismissed.
The oral application for costs certificates made by each party be dismissed.
No order as to costs.

IT IS NOTED that publication of this judgment under the pseudonym Zagari & Habib (Costs) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT ADELAIDE

Appeal Number: SA 84 of 2009
File Number: ADC 5300of 2007

Ms Zagari

Appellant

And

Mr Habib

Respondent

EX TEMPORE REASONS FOR JUDGMENT

On 25 August 2010 I delivered judgment in this matter. It was an appeal against orders made by Kelly FM on 28 August 2009. The appellant was represented by counsel, Mr McQuade, and the respondent appeared in person, but I was aware, and that has been confirmed today, that although Mr Habib appeared in person, he had instructed solicitors in relation to the appeal and those solicitors had undertaken a good deal of legal work in assisting him in both the preparation of the appeal and the presentation of his appeal.
In the end result, I determined that the appeal should be allowed in part. There were a number of grounds of appeal relied upon by the appellant – indeed, 14 in total. I found that all but two of those grounds of appeal were without merit.
With those two grounds of appeal I found that the Federal Magistrate erred in including in the asset pool a particular liability, and in the end result, as I say, I allowed the appeal in part, and the order that I made was to vary the amount that the appellant was to pay the respondent, by reducing it from $76,930 to $49,000. That was arrived at by a strict mathematical calculation, removing from the asset pool the liability that I have referred to, and then applying the percentages determined by the Federal Magistrate as appropriate.
Following the delivery of my reasons for judgment, both parties made oral applications for costs, and today is the day to determine those applications. Pursuant to orders that I made, both parties have filed submissions in support of their respective costs applications.
The costs that the appellant seeks total $18,183.20 plus GST, and that covers solicitors’ costs, counsel’s fees and disbursements, and obviously the major items in the disbursements were the obtaining of the transcript and the preparation of the appeal books.
In his written submissions the respondent in effect sought an order for costs in the total sum of $12,145.93. I do not need to dwell on it greatly, but, unfortunately, included in that total were amounts that, in my view, were not claimable by way of legal costs. For example, the total included amounts that Mr Habib has calculated on the basis of his own time in preparing and presenting his case.
He has also included what is described as a “finance charge” being, as I understand it, the interest that his solicitor has charged him on unpaid accounts. In my view, those items are not claimable under the rubric of legal costs, and that, therefore, reduces the amount that the respondent obviously can hope to achieve.
However, today Mr Habib has indicated that he is no longer seeking an order for costs, and the order that he seeks is that there be no order for costs, ie, dismissing the appellant’s application, presumably, then dismissing his application, and making no order for costs.
In any application for costs, the relevant section to consider is s 117 of the Family Law Act1975 (Cth) , and that section provides:
Section 117
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AB, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
Turning to the appellant’s submissions, Mr McQuade has said that there are circumstances here justifying an order for costs in his client’s favour, and he relies on subparagraphs (a), (e) and (g) of s 117(2A) for that purpose.
Subparagraph (a) requires the Court to have regard to the financial circumstances of each of the parties to the proceedings. Mr McQuade’s submission is that the husband is in a financial situation that he is able to meet any order for costs. In turn, just to interpolate, Mr Habib, in response to that, has submitted that, equally, the wife is in a position to meet any order for costs. More specifically, though, she is able to meet her own costs, which is ultimately, of course, what Mr Habib seeks occur in this case.
Next, in this case, neither party has been wholly unsuccessful, to use the words that appear in subparagraph (e). Clearly, the appellant has been successful to a certain extent in that the appeal has been allowed in part, and the amount, as a result, that she has to pay the respondent is reduced. However, as I have said earlier, and I remind everyone of, there were many other grounds of appeal that the appellant was promoting, and those grounds were unsuccessful.
Mr Habib’s position was that he sought a dismissal of the appeal. Obviously, in that regard he was successful in the sense that I found there was no merit in many of the grounds of appeal, but on the other hand, he was unsuccessful in the sense that there were two grounds of appeal which I found had merit and resulted in allowing the appeal in part.
Looking at both parties’ position in that light, it seems to me it is not possible to say that either party to the proceedings has been wholly unsuccessful. Thus, in my view, subparagraph (e) does not apply here.
That, though, brings in subparagraph (g) in terms of Mr McQuade’s submissions, and that is a catch-all. Mr McQuade suggests that the partial success, if you like, of the appellant can be considered under that subparagraph and support a finding that there are circumstances justifying an order for costs.
In that regard, I agree with Mr McQuade. Subparagraph (g) is a catch-all and in many instances where, for example, a factual scenario cannot be brought within any of the subparagraphs (a) to (f), subparagraph (g) is and can be looked to to see if the actual circumstances are relevant and can be taken into account. Thus I agree with the submission of Mr McQuade, but it works both ways. That subparagraph is a subparagraph where I can take into account the partial success of the appellant, but also the partial success of the respondent.
The respondent is still seeking a dismissal of the wife’s application for costs. I have mentioned Mr Habib’s position in relation to the respective financial circumstances of the parties. I do not need to comment on his position in relation to subparagraph (e), nor with subparagraph (g). They are consistent with what he has said to me in his submissions.
Given those circumstances, in my view, there are no circumstances that justify an order for costs in favour of the appellant against the respondent. The only issue is this issue of the partial success of both of them, and in my view, the partial success of the appellant when compared with the partial success of the respondent cannot, and should not, be found to be a circumstance justifying an order for costs in favour of the appellant.
Both parties have sought that in the event that there is no order for costs that they each be granted a costs certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth). The relevant sections of that Act are s 6 and s 9. They in effect, provide the same thing but apply respectively to appellants and respondents.
Thus, for convenience, if I refer to s 9, that section provides that where a federal appeal succeeds on a question of law and, in accordance with s 117 of the Family Law Act, each party to the appeal bears his or her own costs the Court that heard the appeal may, on the application of the appellant to the appeal, grant to the appellant a costs certificate in respect of the appeal. There is similar wording in s 6 in relation to a respondent.
Now, here the pre-conditions of the sections applying are satisfied. In other words, the federal appeal has succeeded on a question of law, and there is no order for costs. Each party is to bear their own costs, as I have found just a moment ago. On that basis, I have a discretion to grant the parties costs certificates.
However, in my view, neither party should have a costs certificate. It is, as I have said, a discretionary exercise of power, and I refer, for example, to a decision of the Full Court in Tyson and Tyson (No 2) (1993) FLC 92-401, where the discretion that the Court has under these sections was specifically referred to. It is the case that that discretion is at large.
It obviously depends upon the individual circumstances of the case before the Court at the time, but, for example, in that case of Tyson, the matters that were said to be relevant to the exercise of discretion were the overall reasonableness or otherwise of the attitude adopted throughout the proceedings by the party applying for the certificate to the relief sought by the other, the financial resources of the applicant, the likely quantum of that party’s total costs of the appeal as compared with the amount available under a costs certificate. But, again, that recitation was not meant to indicate that those are the only factors to which regard can be had.
It is also significant, of course, that the funds to meet a certificate must come from the public purse. Equally, of course, it is to be taken into account that the appeal has been allowed in part as a result of an error of law made by the Federal Magistrate, and that, of course, is the trigger to the obtaining of a certificate.
However, as I referred to in my reasons for judgment in setting out what the Federal Magistrate had to say about the conduct of the parties and how the case was presented to her, they are significant issues. For example, as I said in paragraph 23 of my reasons of my judgment:
After outlining the background of the matter, the Federal Magistrate, in referring to the evidence before her Honour, commented that neither party had provided proper discovery and that counsel and the Court had been “hampered by the late disclosure of documents and by inadequate or incomplete disclosure of relevant financial records.” The effect of this being that the trial was “significantly longer than it otherwise needed to be”, ultimately being heard over four days.
Further, in paragraph 24:
With respect to the credibility of the parties, the Federal Magistrate found that neither party impressed as a reliable witness and that both had been prepared to make false statements, for example to Centrelink or in order to obtain finance.
They are not the only comments made by the Federal Magistrate of that nature, but perhaps one more example might suffice. As I said in paragraph 107 of my reasons for judgment:
The Federal Magistrate was faced with unsatisfactory and unreliable evidence as to various topics including the relationship of the parties and their respective contributions. Indeed, she said this in paragraph 86:
There are numerous unanswered questions that arise for both parties from the financial records. I am unable to make any specific findings on many of the parties’ claimed contributions on the evidence before me.
…
Thus her Honour was left to do the best she could in the circumstances.
In my view, although there has been an error of law, the circumstances of this matter and the history of it, and the conduct of the parties in the way they presented their respective cases to the Federal Magistrate, making the task of the Federal Magistrate more difficult than otherwise, is highly relevant to the issue of costs and certificates and ultimately where this matter has reached.
For those reasons, I am not prepared to grant either party a costs certificate.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 8 September 2010.

Associate:

Date: 24 September 2010